On 12 May, the French Senate scrapped a controversial tax on palm oil when it adopted a revised version of its biodiversity bill, reports Reuters.

The Senate had earlier approved the €300/tonne palm oil tax on 21 January to encourage sustainable practices in the palm oil sector but the proposal was widely condemned by leading producers, Indonesia and Malaysia.

In March, the National Assembly approved the tax, but sharply reduced its level to start at €30/tonne, and excluded oils produced in a sustainable way (see News, OFI May 2016).

Reuters said the latest version of the biodiversity bill adopted by the Senate scrapped the additional tax on palm oil altogether, with senators saying it could be against international trade rules and that it would be more appropriate in a finance legislation.

However, the decision was not final as the two houses of the French parliament now had to reach an agreement, or the bill would end up at the National Assembly, which had the final word, the report said.

Malaysia and Indonesia have both said the tax is discriminatory, and Indonesia raised the issue at the World Trade Organization in March.

France imports about 100,000 tonnes/year of Indonesian palm oil and bought 11,000 tonnes of Malaysian palm oil last year, Reuters has reported.